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How to not be poor

31 million Americans live in households with incomes below the poverty level, according to the latest U.S. Census data. Poverty is more than a lack of income. It is also the consequence of specific behaviors and decisions. The 2001 Census data clearly show that dropping out of high school, staying single, having children without a spouse, working only part time or not working at all substantially increase the chances of long-term poverty. Certain behaviors are a recipe for success. Among those who finish high school, get married, have children only within a marriage and go to work, the odds of long-term poverty are virtually nil. Learning how to not be poor is one of the ways to avoid falling in to this trap.

Stay in School.
Simply completing high school greatly increases a person’s chances of not being poor. The Census Bureau reports that:

Only 9.6 percent of high school graduates are poor, compared to 22.2 percent of those without a diploma.

Of those people who complete some college, only 6.6 percent fall below the poverty line.

This drops to 3.3 percent of those with a bachelor’s degree or higher.

Furthermore, these lower propensities for poverty last throughout a person’s life. In every adult age group, people who fail to obtain a high school degree are more than twice as likely to fall into poverty. People ages 25 to 54 are nearly three times as likely.

The numbers are worse for long-term poverty – poverty that lasts for years. An Organization for Economic Cooperation and Development (OECD) report found that in the United States:

High school dropouts suffer a long-term poverty rate of 14.2 percent, while high school grads have only a 3.8 percent long-term poverty rate.

Only 1.2 percent of adults receiving some education beyond high school are poor long-term.

Get a Job.
Despite concerns about the working poor, most people who work full time, even at minimum wage jobs, avoid poverty:

Only 2.6 percent of people 16 years or older with full time jobs are poor, according to Census data.

By contrast, 11.4 percent of part-time workers fall under the poverty line, and 20.8 percent of those who do not work fall below the poverty line.

The advantages of work hold true even for at-risk groups, such as single mothers:

About 83 percent of single mothers who do not work are in poverty, compared to nearly 60 percent who work part time.

But less than 18 percent of single mothers who work full time are in poverty.

Working also significantly reduces long-term poverty. According to an analysis of the Census Bureau’s Survey of Income and Program Participation, 10.8 percent of adults who do not work are poor over the long term. In contrast, only 1.7 percent of those employed part time stay poor for extended periods. People employed full time have a 0.4 percent chance of long-term poverty.

Moreover, the government can encourage behavioral changes. Research shows that between one-third and one-half of the fall in poverty among single mothers on welfare after 1994 was due to the 1996 welfare reforms that encouraged work.

Get Married.
Marriage is also a strong deterrent to poverty.

Only 4.0 percent of married couples without children are in poverty, according to Census data.

In contrast, the poverty rate for singles without children is 8.6 percent.

Moreover, married couples are less likely to experience long-term poverty. According to the OECD report:

Married couples without children have a long-term poverty rate of only 1.3 percent.

By contrast, 7.9 percent of single adults experience long-term poverty.

Marriage promotes economic advancement. One study found that married men earn 22 percent more than their unmarried counterparts. The OECD reports that a woman head of household who marries increases her chances of exiting poverty by 23 percent. A single person who marries and finds employment increases his or her chances of leaving poverty by over 50 percentage points.

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Please link this comment with the following “how to” pages.
– How to pay for school if you are poor.
– How to get a job when most employers reject poor applicants.
– How to get married if you are poor.